Most of us live in democracies that rely on the legitimacy of popular vote. Yet we trust knowledge professionals to carry the burden of making some choices for us. Some such experts leer over individual actions. Others examine the traces of customs and culture. Still others visit markets, companies and clubs. Be it an anthropologist, an economist, a historian or a sociologist, their brief is the same: to produce knowledge about society for its regulation and civic management.

We are in a crisis of trust in knowledge.

But when the multitude withdraws its trust from experts, the contract between the polity and these idea-makers breaks. With the collapse of both the world economy and the narrative of globalization, we are in a crisis of trust in knowledge—a crisis not unlike the one that created the contemporary institutions of social science in the decades following the Civil War. In fact, the history of American social science can be told (and has been told) as a struggle against recurrent crises of public authority.

The American Historical Association was created in 1884 as a platform to speak out on matters of political and social reform. The American Economic Association was an outgrowth of this historians’ association, created a year later to project an image

of detached interest on worldly matters and assert stolid academicism. The American Sociological Association then broke out from the economists’ company in 1905 to reclaim relevance and social engagement. These successive professional societies offered separate solutions to the problem of public credibility by placing the disciplines in distinct relationships with the state and civil society. But ethical entanglements persisted.

Their enforcement and stringency
usually trails
their exposure to litigation.

It took 127 years, but economists have finally accepted that money can turn your mind and soil your soul. Starting with its 103rd volume in 2013, the auburn-bound American Economic Review will add to each article a disclosure of the financial interests of its authors. Other professions have similar rules, and their enforcement and stringency usually trails their exposure to litigation. Biomedical research, and publication of its findings, is vetted insistently by Institutional Review Boards, with oaths and codes of conduct as complement. So far, economists have been spared the courts.

Economists are too pragmatic for such ceremony as vowing loyalty to honesty and public service. Few economists believe in the existence

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of a public interest. The majority of them subscribe to a view of human nature that is all self-love and no malice. All individuals are alike. Individuals are good and reasonable. Individuals follow their desires. Individuals trade these impulses into a state of the world that favors all. No need to place public interest in that equation and interfere with liberty.

GOING TO THE MOVIES

It took an academy award to get economists to admit that corruption could strike their own.

No need to place public interest in that equation and interfere with liberty.

On March 8, 2011, the United States Senate Committee on Finance held a hearing on tax reform. Committee member Senator Thomas Carper (Democrat from Delaware) led his questions with the statement: “How many times can you hold a hearing where we actually have as a witness one of the stars of an Academy Award-winning film?” Carper was teasing Glenn Hubbard, Dean of the Columbia University Business School and once chairman of the White House’s Council of Economic Advisers. Hubbard was one of the villains in the 2010 financial crisis documentary, Inside Job.

Written, directed and produced by the omni-successful Charles Ferguson, the documentary casts economists as comic (and tragic) relief. The film is a denunciation of how Wall Street excess and hubris ushered the current economic crisis. Ferguson interviews economists who recently served in the White House, Congress and Federal Reserve. The group, accustomed to journalistic deference, showed surprise when Ferguson queried them about their consultancy pay and how that might have colored their advocacy for financial deregulation. Hubbard, faced by the challenge, is filmed fuming in anger.

The group showed surprise when Ferguson queried them about their consultancy pay.

Inside Job changed the narrative. In the many reckonings that the current crisis elicited, it was economists’ turn to stand on trial. We were soon learning of academic economists’ difficult predicament. The data that they use—indispensable to their efforts as knowledge producers—is either the property of state statistical offices or of the business community. Professors pad their pay checks with consultant gigs and board appointments at corporations. The moneyed interest funds departments, conferences and publishing. Economists are dependents.

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FOLLOW THE MONEY, MEET THE SCANDAL

Business patronage of economists has a long and respectful history. But in the past it was delivered primarily through philanthropies. From its inception, the Rockefeller Foundation has promoted world social science with collaborative centers, reports and visiting programs. In the 1950s, the Ford Foundation’s mammoth endowment steered entire disciplines, it opened or closed schools of policy and international studies and it helped reform business schools. But from the Second World War, the principal investor in American social science was the American defense establishment.

The principal investor in American
social science was the American
defense establishment.

Through a network of think thanks, summer fellowships and grants, the US Department of Defense and its affiliates ushered in the mathematization of economics in the early Cold War decades. Then, in 1957, with the Sputnik satellite beeping creepily over the stratosphere, the US government expanded its funding of science, all science. Social scientists began to enjoy increased bounty. Universities got bigger and richer as social science became eligible for National Science

Foundation grants. Since the 1970s, this kind of patronage has gone stagnant. Steadily, the share of public patronage has decreased, and funding increases have been sourced to business and finance. Social science is no longer philanthropic and exacted for the sake of advancing knowledge, but rather for a purpose, and interweaved with consulting and partnerships. The reasons for the change in regime of funding science are not fully understood, but certainly one element was the late 1960s crisis in the authority of science.

The one scandal that has received the most attention by historians, because it received the most attention by social scientists at the time, was Project Camelot In the spring of 1965, Radio Moscow, Havana Radio and Politica magazine of Mexico City revealed the existence of plans by the US Department of Defense to employ social scientists in information collection and strategy design for counterinsurgency in the Americas. The White House promptly cancelled Project Camelot. The list of consultants included an impressive cross-section of social scientists, distinguished sociologists, political scientists, psychologists and economists.

The anthropologists led the response. In letters to the New York Times and in professional newsletters, anthropologists represented Camelot as an example of politics masquerading as science.

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A Committee on Ethics was set up in 1967 for the jobs of surveillance and public denunciation. Also responding to Camelot, the American Sociological Association was far more modest in its efforts, and set a model that has been more enduring. It demanded disclosure of funders and began in the final years of the 1960s the publication of “advisory positions” that have stacked up a body of literature on what is proper conduct for a social scientist. It publicized that sociologists were reflective types.

Economists did not respond to Camelot. Over the years, there have been multiple attempts within the American Economic Association to start a conversation about ethical standards. A committee existed under that name in 1959-61, with the mandate to examine “plagiarism or questionable practices in using or refusing manuscripts for publication.” It was of no consequence and left no descendant. Later, in the 1960s into the 1980s, when individual members petitioned the Association to create an ethics committee, the response by the Executive Committee was always the same: no need. Economists are now catching up with their fellow social scientists by imposing standards of disclosure to the service of their officers and in the authorship of research at the prestige journals.

Is it enough?

SYMBOLS AND POWER

There is no legislation in the USA requiring economists to be certified as economic experts. Economists serve as experts by force of their education and achievements. And that credibility often relies on complex symbolic plays. A Professor at an elite university will be approached as an uncertified certified expert. Elite universities hire professors who show promise in publishing at the top journals of the field. To produce that research, access to business data and funds—public or private—is requisite.

Tacitly, symbolically, the American Economic Association is in the job of certifying expertise.

The American Economic Association is not the only association of American economists and like species in the USA, but it is the most prestigious and the most populous, with 17,000 paying members. Its journals are the elite journals. And its officers, although not having direct control of funds, have a say on appointments at major universities, and speak on the behalf of the collective. Tacitly, symbolically, the American Economic Association is in the job of certifying expertise.

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Scientists, not just economists, not just social scientists, exercise self government. Since the birth of such institutions like the Royal Society and similar scholarly societies, scientists have shielded themselves from control by the king, the state, the public and business too. Scientists maintain they are the only ones competent to speak on science’s matters, and that they can regulate their own disputes without the aid of outsiders. Economists have violently opposed any attempts to legislate the direction and practice of economic research. To embrace ethics is to pre-empt government from taking steps to regulate economics at a time when the crisis in the profession was the subject of a hearing at the House Science and Technology Committee (July 20, 2010).

The Association has repeatedly asserted itself as powerless and lacking any credible sanction to impose propriety in the public lives of economists. It has also never tried. The association’s Conflict of Interest Policy now requires the minutes of the Executive Committee meetings to record actual or potential financial or positional conflict of interest of the Association’s officers. To read the list is to discover how a small cadre holds the executive power in the profession, the editorship to the main academic publications and the directorship of research centers across the nation (see the minutes of the April 15, 2011, meeting of the Executive Committee).

Invariably, the list of potential conflicts of interest is met by the conclusion that no conflict of interest exists.

WHAT TO DO?

The late Sixties scandals set the model that has guided economists’ reaction to their current crisis of credibility. They are turning to ethics. But this solution feels awfully inadequate. It frames fault as individual misdeed. It releases collective action of responsibility, even if it entrusts it of producing thoughtful guidelines and rules of conduct to stack shelves unread. It creates a new expert, the ethics officer. Sanction, however, remains absent.

What we lack is an open conversation about whether, as citizenry, we need economic knowledge. I think the answer is yes. If so, how should it be funded? Is it important enough to deserve public patronage and be sheltered from other interests in society? I think the answer there is also yes. The makers of ideas cannot be allowed to be free-floating knowledge entrepreneurs seeking the highest bidder. They need to be brought back into the polity. However immaterial, their opinions amplify and impact ordinary people’s quality of life, sense of self and sense of worth. Economists need to be made responsible for the impact of their ideas.

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In an age of belt-tightening, giving more funds to economists is an implausible program. But it is not a bad moment to reflect about what kind of public economic knowledge we need. Ethical discourse does probe what kind of science we need, calling for one that is mindful of its implications and its interactions with subjects. But ethical discourse obscures the question of how knowledge is funded and how knowledge is vetted. It hides the question of power, and it denies the urgent recognition that even science needs to be governed. We need research priorities. We need economists to partner with the most vulnerable and dispossessed. And economists will have to be led there—they won’t go on their own.

***

Tiago Mata is an intellectual historian from Portugal who specializes in economics. He is currently a Research Associate at the Department of History and Philosophy of Science at the University of Cambridge, after a stint as Research Fellow at the Center for the History of Political Economy at Duke University. He has a PhD in Economic History from the London School of Economics, and an MPhil in Development Economics and Methodology from the University of Cambridge.

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